Superior Court of Justice - Ontario

COURT FILE NO.: 10-43830
DATE: 20120321

RE: CHERYL ELIZABETH SHAND, Applicant

AND:

RICHARD GORDON SHAND, Respondent

BEFORE: Glithero J.

COUNSEL:
Ronald Zboril, for the Applicant
David J. Thrasher, for the Respondent

RULING ON COSTS

[ 1 ] In written reasons released February 9, 2012 I dismissed the applicant’s claim for spousal support and invited written submissions on costs if the parties were unable to agree on that issue. Written submissions have now been received from both counsel.

[ 2 ] I remind myself of the provisions in rule 24 respecting costs in family law proceedings. That rule creates a presumption of entitlement to costs in favour of a successful party. Subsection (11) requires that the court consider the following factors,

(i) The importance, complexity or difficulty of the issues;

(ii) the reasonableness or unreasonableness of each party’s behaviour;

(iii) the lawyers’ rates;

(iv) the time properly spent on the case;

(v) expenses properly paid or payable;

(vi) any other relevant matter.

[ 3 ] In subsection (5), the rule provides that in considering whether a party’s behaviour was reasonable or unreasonable, the court shall examine whether or not the party made an offer to settle, the reasonableness of any offer to settle, and any offer a party failed to accept.

[ 4 ] On behalf of the respondent husband, counsel claims costs on a substantial indemnity basis, submitting that there was no basis for the claim for spousal support, and that the trial and resulting costs to the respondent were entirely unnecessary. Mr. Shand made an offer to settle. It took the form of the mandatory paragraph 19 in a settlement conference brief signed by him and by his lawyer on September 22, 2010. The offer provides to settle the matter on the basis that the divorce would proceed on an undefended basis, the applicant would convey her interest in the matrimonial home to the respondent, the respondent would be responsible for all joint debts, there would be no spousal or child support, and that each party would be responsible for their own legal costs. The offer is not time limited, and was made well in advance of trial. At trial, the issue of the divorce went on consent, as did the transfer of property. The respondent became responsible for all joint debts, as the result of the applicant’s decision to go bankrupt. The result of the only live issue at trial was the applicant received no spousal support. The offer provided that each party was responsible for their own legal costs.

[ 5 ] Accordingly, the order obtained at trial by the respondent husband was as favourable or more favourable than the terms of the offer to settle made by him. The respondent advises that the pre-trial judge recommended that the applicant accept the offer to settle, and that is not refuted in the respondent’s submissions. Accordingly, the respondent is entitled to partial indemnity costs to the date that the offer was served, and full recovery costs from that date onwards, unless the court orders otherwise.

[ 6 ] The bill of costs submitted on behalf of the respondent is compiled on the basis of an hourly rate of $350.00 per hour on a partial indemnity scale, or $475.00 on a substantial indemnity scale. The respondent’s counsel has 40 years of experience. The hourly rates claimed are not challenged by counsel for the applicant. I find them to be reasonable.

[ 7 ] In my opinion, the number of hours charged in respect of the various steps in the proceeding as detailed in the bill of costs appear reasonable. I take into account that counsel for the applicant does not challenge the number of hours claimed in his responding submissions. The written submissions on behalf of the applicant point out that the court retains a discretion as to the quantum of costs and whether they ought to be awarded. In his second paragraph, the applicant’s counsel suggests that for an award on the substantial indemnity scale, there has to be “reprehensible, scandalous or outrageous conduct” on the part of the party ordered to pay costs. Given the provisions in the Family Law Rules , I do not agree. The applicant’s counsel submits that the emotional atmosphere prevalent in these types of cases explains behaviour which is not exemplary, and explains why a case proceeds when it ought not in terms of the merits. That reasoning, if it prevailed, would negate cost consequences in most matrimonial trials.

[ 8 ] Respondent’s counsel raises another factor that I think relevant, although not decisive. During the trial, evidence was adduced that the applicant and a male friend had gone on a number of vacations during the period of time the applicant was not working and testified to being in a state of poverty. This was all explained on the basis that her friend paid all of the expenses, and that their romantic relationship had ended and that there was no understanding or plan as to whether it would continue in the future. In his submissions, the respondent’s counsel points out that in less than a month after the conclusion of the trial, the applicant and her friend travelled to the Caribbean on yet another vacation. That alleged fact is not disputed in any way in the submissions filed on the applicant’s behalf by her counsel. Mr. Shand’s lawyer submits that this shows the trial evidence of Mrs. Shand to be untruthful. As it is possible, as suspicious as it may be, that the decision to go on yet another trip with three weeks of the trial conclusion was a last minute decision, in my opinion, there is some merit to the allegation in that clearly the relationship between Mrs. Shand and her male friend was not as unsettled or unclear as was suggested in the trial testimony.

[ 9 ] The offer to settle was date September 22, 2010.

[ 10 ] I fix the costs payable on a partial indemnity scale up to the date of the offer to settle in the amount of $5,005.00, and the fees thereafter on a substantial indemnity scale in the amount of $12,207.50, for total fees in the amount of $17,212.50, plus H.S.T. on that amount in the sum of $2,237.62, for total fees plus H.S.T. in the amount of $19,450.12.

[ 11 ] In my opinion, the disbursements claimed are all reasonable and I note that there is no complaint voiced in the applicant’s submissions. Disbursements are awarded in the amount fixed at $649.50 plus applicable H.S.T. in the amount of $7.21 for a total of $656.71, which when added to the fees results in a total cost award fixed in the amount of $20,106.83.

[ 12 ] I am not unmindful of the financial condition of the unsuccessful party is a factor that can be considered in a cost award. Here, while in poor financial condition, the applicant is responsible as it is she who has chosen not to work. The respondent is in a poor financial position as a result of bearing the joint debts which the applicant left for him to pay.

[ 13 ] The policy within the rules designed to encourage parties to settle these disputes where it is reasonable to do so is thwarted if an unsuccessful party can ignore a reasonable offer to settle because of a belief that an inability pay will render her immune to cost consequences, and hence that it is worth rolling the dice.

[ 14 ] Before concluding, I note that some typewritten submissions from the applicant directly were forwarded to another court office here in Hamilton and eventually to my office. I have returned them to Mrs. Shand and pointed out to her that it is inappropriate for her to communicate with the presiding judge directly, and particularly without notice to the other side, and apparently without notice to her own counsel.

Glithero J.

Date: March 21, 2012